Making sustainability sustainable
Editorial
Last year saw a backlash against ESG investment and climate change regulation in the US, with similar examples of watering down or postponement of sustainability-related regulation in some parts of Europe. Despite this, businesses’ evidence suggests a continued, and indeed increased, commitment to sustainability as it becomes more central to business strategy. But this also comes with a new realism about the massive challenges of achieving net zero and the huge costs involved. We have devoted this issue of Prism to exploring some of the challenges and how we can address them. As one might expect, there are no easy solutions, so be prepared for some in-depth content that hasn’t been dumbed down!
Climate change adaptation is now finally coming to the fore, not as an alternative to mitigation but as an essential complement to it. Yet today, there is still very little adaptation regulation or investment. Based on a major in-depth study by Arthur D. Little’s Blue Shift Institute, our first article explores the nature of the adaptation challenges across the industry, imagines scenarios for how it could unfold, and proposes what businesses should be doing now in response — before it’s too late.
Lithium-ion (Li-ion) batteries are central to the green shift. Battery demand is forecast to increase sevenfold in the next decade. Creating a circular economy to recycle spent batteries is essential, yet circular models are currently unprofitable in many regions, such as Europe. We set out a blueprint for “urban mining” — how to successfully and profitably recycle Li-ion batteries locally, a template that can also be applied to other materials, such as electronics, plastics, and metals.
Carbon pricing has existed for over two decades, and today, national and regional schemes cover about one-quarter of all global greenhouse gas emissions. Many companies already use internal carbon pricing to help factor the economics of emissions into investment decision-making, but there are challenges in finding accurate data, and commercial pressures often push it to the periphery of the business. Our third article outlines a way for companies to get a better grip on internal carbon pricing to make it more effective and meaningful.
Our next three articles dive into different important domains for our future sustainability. The first is mobility. Transport accounts for around 15% of global CO2 emissions, the only sector with a steady increase since 1990. Despite the high hopes of 15 years ago, most journeys are still by private car. Our renowned Future of Mobility Lab and transport industry partner POLIS have made an in-depth study of what we need to do next to accelerate the shift toward sustainable, resilient, safe, efficient, and human-centric mobility systems in our cities. We offer a taster of the full results in this edition of Prism.
Next is steel production, which is responsible for a not-insignificant 5% of global CO2 emissions. Along with green electricity, hydrogen, and new production technologies, scrap recycling is the key to decarbonization, and we offer a strategic approach to making this more commercially viable.
Aviation needs to move to sustainable, low-carbon fuels. The main issue here is the lack of investment in building adequate green fuel production capacity. There are no easy answers, but we look in depth at what governments, producers, investors, and customers must do to unlock what we believe is a very attractive market.
To wrap things up for this issue, we bring you the latest developments in a promising energy-from-space technology — mirrors in the sky to increase the output of existing solar energy farms greatly. Once thought of as too costly, impractical, and even fanciful, this concept has suddenly started looking much more feasible. How it has developed provides us with some valuable lessons for approaching innovation for sustainability. Ultimately, we will only have a realistic chance of making sustainability sustainable through finding new ways of collaborating globally and harnessing the power of technological innovation.
We hope you enjoy the issue!
Rick Eagar
Chief Editor, Prism
Arthur D. Little
DATE
Editorial
Last year saw a backlash against ESG investment and climate change regulation in the US, with similar examples of watering down or postponement of sustainability-related regulation in some parts of Europe. Despite this, businesses’ evidence suggests a continued, and indeed increased, commitment to sustainability as it becomes more central to business strategy. But this also comes with a new realism about the massive challenges of achieving net zero and the huge costs involved. We have devoted this issue of Prism to exploring some of the challenges and how we can address them. As one might expect, there are no easy solutions, so be prepared for some in-depth content that hasn’t been dumbed down!
Climate change adaptation is now finally coming to the fore, not as an alternative to mitigation but as an essential complement to it. Yet today, there is still very little adaptation regulation or investment. Based on a major in-depth study by Arthur D. Little’s Blue Shift Institute, our first article explores the nature of the adaptation challenges across the industry, imagines scenarios for how it could unfold, and proposes what businesses should be doing now in response — before it’s too late.
Lithium-ion (Li-ion) batteries are central to the green shift. Battery demand is forecast to increase sevenfold in the next decade. Creating a circular economy to recycle spent batteries is essential, yet circular models are currently unprofitable in many regions, such as Europe. We set out a blueprint for “urban mining” — how to successfully and profitably recycle Li-ion batteries locally, a template that can also be applied to other materials, such as electronics, plastics, and metals.
Carbon pricing has existed for over two decades, and today, national and regional schemes cover about one-quarter of all global greenhouse gas emissions. Many companies already use internal carbon pricing to help factor the economics of emissions into investment decision-making, but there are challenges in finding accurate data, and commercial pressures often push it to the periphery of the business. Our third article outlines a way for companies to get a better grip on internal carbon pricing to make it more effective and meaningful.
Our next three articles dive into different important domains for our future sustainability. The first is mobility. Transport accounts for around 15% of global CO2 emissions, the only sector with a steady increase since 1990. Despite the high hopes of 15 years ago, most journeys are still by private car. Our renowned Future of Mobility Lab and transport industry partner POLIS have made an in-depth study of what we need to do next to accelerate the shift toward sustainable, resilient, safe, efficient, and human-centric mobility systems in our cities. We offer a taster of the full results in this edition of Prism.
Next is steel production, which is responsible for a not-insignificant 5% of global CO2 emissions. Along with green electricity, hydrogen, and new production technologies, scrap recycling is the key to decarbonization, and we offer a strategic approach to making this more commercially viable.
Aviation needs to move to sustainable, low-carbon fuels. The main issue here is the lack of investment in building adequate green fuel production capacity. There are no easy answers, but we look in depth at what governments, producers, investors, and customers must do to unlock what we believe is a very attractive market.
To wrap things up for this issue, we bring you the latest developments in a promising energy-from-space technology — mirrors in the sky to increase the output of existing solar energy farms greatly. Once thought of as too costly, impractical, and even fanciful, this concept has suddenly started looking much more feasible. How it has developed provides us with some valuable lessons for approaching innovation for sustainability. Ultimately, we will only have a realistic chance of making sustainability sustainable through finding new ways of collaborating globally and harnessing the power of technological innovation.
We hope you enjoy the issue!
Rick Eagar
Chief Editor, Prism
Arthur D. Little
TABLE OF CONTENTS
Adapting to an uncertain future
Mitigation gets most of the big headlines in the global discourse on the changing climate. However, no matter how successful — or not — the world is at mitigating global warming, many of the impacts of climate change are already underway and will greatly affect our future.
Opening the urban mine
Creating circular supply chains is essential to the green transition, particularly when it comes to recycling and reusing rare materials. Yet, while many circular economy initiatives may be sustainable, they are not profitable, which hampers their wider development and holds back the achievement of sustainability goals.
Getting a grip on decarbonization with effective internal carbon pricing
Regulators and other stakeholders are increasing pressure on organizations to monitor, improve, and share information on their greenhouse gas (GHG) emissions. They want increased transparency around targets, timelines, and plans and are increasingly demanding actual results from decarbonization efforts. The number of emission trading schemes (ETS) and carbon taxes is rising worldwide. In 2024, 75 carbon pricing initiatives were in place, covering 24% of global GHG emissions. Other countries are discussing implementing their own carbon pricing schemes.
Making the shift
When Arthur D. Little (ADL) first set up its Future of Mobility Lab in 2010, there was much optimism that by now, we would have made significant progress toward the goal of more sustainable, resilient, safe, inclusive, efficient, and human-centric mobility systems in our cities. Technological developments — particularly the rapid advances of digitalization, connectivity, and automation — promised the ability to deliver tailored, diverse, and convenient mobility solutions to customers that would be attractive enough to prompt a major shift away from private cars.
Is steel scrap the new gold?
Steel production is responsible for 7%[1] of global carbon dioxide (CO2) emissions, underscoring the urgency of reducing its carbon footprint to meet net zero targets. Regulators are intensifying their efforts; for instance, Europe aims to cut CO2 steel production emissions by nearly 25% by 2030.
Accelerating the financing of sustainable transport fuels
Transport was responsible for 14% of global greenhouse gas (GHG) emissions in 2023. While electrification is the most efficient way to decarbonize road transport, inland/nearshore shipping, and even short-haul flights, it does not cover every use case. That means different approaches will be needed for areas such as long-haul flights (2% of GHG emissions) and shipping (1% of GHG emissions).
Back to the future
Most would agree that technological innovation is an essential part of our response to the existential threats of climate change. Indeed, only through innovation will it be possible to achieve net zero emissions and adapt to new climate conditions while maintaining — and hopefully further improving — economic and social well-being.
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